OPERATIONS RESEARCH

AN OVERVIEW

08/03/08 1
After reading the present module, learner will be able to:

• General Objectives:
• Understand the concept of Operations Research
• Know Phases and Process of Operations Research

• Specific Objectives:

• Name the basic terms related with O.R

• Define basic terms related with OR.
• Define Operation Research
• Describe the phases of O.R.
• Draw the flow chart of O.R. approach.
• List out the various techniques of O.R.
• Give application fields of various techniques.
• List out the components of mathematical model.
• State advantages and limitations of O.R.
• Identify the various application fields of O.R.

08/03/08 2
 Module -Table of Contents
• Introduction
• Origin
• Practice Task
• Phases and Process of OR
• Practice Task
• Techniques of OR
• Advantages and Disadvantages Of OR
• Applications of OR
• Practice Task
• References
08/03/08 3
 Introduction
Hello learners, this is first self-learning module on Basics of Operations
Research.
Today, almost every large organization or corporation in developed nations
as well as to some extent in developing countries has executive applying
operations research, and in government the use of operations research has
spread from military to widely varied departments at all levels.
Availability of faster and flexible computing facilities and the number of
qualified OR professionals has enhanced the acceptance and popularity of
the discipline. The growth of OR has not been limited to the USA and the
UK, now it has reached to many countries including India.
India was one of the first few countries who started using OR. In 1949, the
first OR unit was established in the Regional Research Laboratory at
Hyderabad. Today, OR is a popular subject in management, mechanical
engineering and the mathematics.
So for engineers, the knowledge of OR is very essential not just for
placement but also for career growth. This is first module defines
Operations Research and gives a brief historical background of it. It also
gives insight into the approaches and tools of OR and identify the
application areas in which OR has used successfully.
ALL THE BEST for this wonderful Journey.
08/03/08 4
 ORIGIN
• The ambiguous term Operations Research (OR) was coined
during world war II, when the British Military Management called
upon a group of scientists together to apply a scientific approach
to the study of military operations to win the battle.
• Operations Research originated in Great Britain during World War II
to bring mathematical or quantitative approaches to bear on military
operations.
• The main objective was to allocate the scarce resources in an
effective manner to the various military operations and to the
activities within each operation.
• The effectiveness of operations research in military spread in it
to other government department and industry.
• Due to the availability of faster and flexible computing facilities
and the no. of qualified O.R. professionals, it is now widely used
in military, business, industry, transportation, public health etc.
• Since its birth in the 1940's, OR has been widely recognized as an important
approach to decision-making in the management of all aspects of an
organization.

08/03/08 5
 TIME STARVED EXECUTIVES
ARE MAKING BOLDER
DECISIONS WITH LESS RISK
AND BETTER OUTCOMES.
THEIR SECRET
OPERATION RESEARCH

08/03/08 6
 INTRODUCTION
• It is concerned with co-ordinating and controlling
the operations or activities within the
organization.
• O.R. can be regarded as the mathematical and
quantitative techniques to substantiate the
decisions being taken.
• O.R. takes tool from subjects like statistics,
mathematics, engineering, economics,
psychology etc. and uses them to know the
consequences of possible alternative actions.
• Operations research (OR) is a discipline
explicitly devoted to aiding decision makers.
08/03/08 7
 OPERATIONS

The activities carried out in an

organization related to attaining its
goals and objectives.

08/03/08 8
 RESEARCH

The process of observation and testing

characterized by the scientific method. The
steps of the process include observing the
situation and formulating a problem
statement, constructing a mathematical
model, hypothesizing that the model
represents the important aspects of the
situation, and validating the model through
experimentation.
08/03/08 9
 ORGANIZATION

The society in which the problem arises or

for which the solution is important. The
organization may be a corporation, a
branch of government, a department
within a firm, a group of employees, or
perhaps even a household or individual.

08/03/08 10
 DECISION MAKER

An individual or group in the

organization capable of proposing
and implementing necessary actions.

08/03/08 11
Practice Task

1.The process of observation and testing characterized by the scientific

method.
(True/False)

08/03/08 12
Yes, you are true. Scientific methods are employed for observation and
test the situations.

Now Answer the Next Question.

08/03/08 13
No, you are wrong. Unscientific methods leads to confusion and donot
give reliable and valid solutions.

Now Answer the Next Question.

08/03/08 14
Practice Task

2. Operations Research (OR) was coined during world war II, when the
_ _ _ _ _ _ _ _ _ _ Management called upon a group of scientists.

08/03/08 15
 Ans. British Military

You are excellent! Now you learn the next input.

08/03/08 16
 MAKING DECISIONS OR
TAKING ACTIONS IS
CENTRAL TO ALL
OPERATION RESEARCH
APPLICATIONS

08/03/08 17
 DEFINITIONS
• OR is a scientific method of providing executive
departments with a quantitative basis for
decisions regarding the operations under their
control. – Morse & Kimball
• Operations research is a scientific approach to
problem solving for executive management. –
H.M. Wagner
• Operations research is an aid for the executive
in making this decisions by providing him with
the needed quantitative information based on
the scientific method of analysis. – C. Kittel
08/03/08 18
Nature of O.R. Characteristics
• Inter-disciplinary team approach
• Systems approach
• Helpful in improving the quality of solution
• Scientific method
• Goal oriented optimum solution
• Use of models
• Require willing executives
• Reduces complexity
08/03/08 19
 PHASES
OPERATIONS RESEARCH

08/03/08 20
1. Recognize the Problem
08/03/08 21
 1. Recognize the Problem
• Decision making begins with a situation in which a
problem is recognized.
• The problem may be actual or abstract, it may
involve current operations or proposed expansions
or contractions due to expected market shifts, it may
become apparent through consumer complaints or
through employee suggestions, it may be a
conscious effort to improve efficiency or a response
to an unexpected crisis.
• It is impossible to circumscribe the breadth of
circumstances that might be appropriate for this
discussion, for indeed problem situations that are
amenable to objective analysis arise in every area of
human activity.
08/03/08 22
08/03/08 23
 2. Formulate the Problem
• At the formulation stage,
statements of objectives, constraints on solutions,
appropriate assumptions, descriptions of processes,
data requirements, alternatives for action and metrics
for measuring progress are introduced.
• Because of the ambiguity of the perceived situation,
the process of formulating the problem is extremely
important. The analyst is usually not the decision
maker and may not be part of the organization, so
care must be taken to get agreement on the exact
character of the problem to be solved from those who
perceive it. There is little value to either a poor solution
to a correctly formulated problem or a good solution to
one that has been incorrectly formulated.
08/03/08 24
08/03/08 25
 3. Construct a Model
• A mathematical model is a collection of functional relationships by which
allowable actions are delimited and evaluated. Although the analyst would
hope to study the broad implications of the problem using a systems
approach, a model cannot include every aspect of a situation.
• A model is always an abstraction that is, by necessity, simpler than the
reality.
• Elements that are irrelevant or unimportant to the problem are to be ignored,
hopefully leaving sufficient detail so that the solution obtained with the
model has value with regard to the original problem.
• The statements of the abstractions introduced in the construction of the
model are called the assumptions. It is important to observe that
assumptions are not necessarily statements of belief, but are descriptions of
the abstractions used to arrive at a model. The appropriateness of the
assumptions can be determined only by subsequent testing of the model’s
validity.
• Models must be both tractable -- capable of being solved, and valid --
representative of the true situation. These dual goals are often contradictory
and are not always attainable. We have intentionally represented the model
with well-defined boundaries to indicate its relative simplicity.
08/03/08 26
08/03/08 27
 4. Find a Solution(1)
• The next step in the process is to solve the model to
obtain a solution to the problem. It is generally true
that the most powerful solution methods can be
applied to the simplest, or most abstract, model.
• Some methods can prescribe optimal solutions while
other only evaluate candidates, thus requiring a trial
and error approach to finding an acceptable course of
action.
• It may be necessary to develop new techniques
specifically tailored to the problem at hand. A model
that is impossible to solve may have been formulated
incorrectly or burdened with too much detail. Such a
case signals the return to the previous step for
simplification or perhaps the postponement of the
study if no acceptable, tractable model can be found.
08/03/08 28
 4. Find a Solution(2)
• Of course, the solution provided by the
computer is only a proposal. An analysis does
not promise a solution but only guidance to the
decision maker.

• Choosing a solution to implement is the

responsibility of the decision maker and not the
analyst. The decision maker may modify the
solution to incorporate practical or intangible
considerations not reflected in the model.

08/03/08 29
08/03/08 30
 5. Establish the Procedure(1)
• Once a solution is accepted a procedure must be
designed to retain control of the implementation
effort.
• Problems are usually ongoing rather than unique.
Solutions are implemented as procedures to be
used repeatedly in an almost automatic fashion
under perhaps changing conditions.
• Control may be achieved with a set of operating
rules, a job description, laws or regulations
promulgated by a government body, or computer
programs that accept current data and prescribe
actions.
08/03/08 31
 5. Establish the Procedure(2)
• Once a procedure is established (and implemented),
the analyst and perhaps the decision maker are
ready to tackle new problems, leaving the procedure
to handle the required tasks.
• But what if the situation changes?
• An unfortunate result of many analyses is a remnant
procedure designed to solve a problem that no
longer exists or which places restrictions on an
organization that are limiting and no longer
appropriate.
• Therefore, it is important to establish controls that
recognize a changing situation and signal the need
to modify or update the solution.
08/03/08 32
08/03/08 33
 6. Implement the Solution
• A solution to a problem usually implies changes for some
individuals in the organization. Because resistance to
change is common, the implementation of solutions is
perhaps the most difficult part of a problem solving
exercise.
• Some say it is the most important part. Although not
strictly the responsibility of the analyst, the solution
process itself can be designed to smooth the way for
implementation.
• The persons who are likely to be affected by the
changes brought about by a solution should take part, or
at least be consulted, during the various stages involving
problem formulation, solution testing, and the
establishment of the procedure.
08/03/08 34
 The OR Process
• Combining the steps we obtain the complete OR
process.
• In practice, the process may not be well defined
and the steps may not be executed in a strict
order. Rather there are many loops in the process,
with experimentation and observation at each step
suggesting modifications to decisions made
earlier.
• The process rarely terminates with all the loose
ends tied up. Work continues after a solution is
proposed and implemented. Parameters and
conditions change over time requiring a constant
review of the solution and a continuing repetition
of portions of the process.
08/03/08 35
08/03/08 36
 O.R. APPROACH

08/03/08 37
Practice Task

1. Write the name of the phases of O.R.

Check your answer.

08/03/08 38
 Ans. Judgment Phase
Research Phase
Action Phase

Now Answer the Next Question.

08/03/08 39
Practice Task

2. Decision making begins with a situation in which a problem is

recognized. (True/False)

08/03/08 40
 Yes, it is true. Problem is firstly identified then other phases follows.

Now Answer the Next Question.

08/03/08 41
No, you are wrong. If problem is not recognized at first, there will
be ambiguity in the process of finding optimum solution.

Now Answer the Next Question.

08/03/08 42
Practice Task

3. Why formulation of problem is necessary to solve O.R. problem?

Check your answer.

08/03/08 43
Ans. 3 Because of the ambiguity of the perceived situation, the process
of formulating the problem is extremely important.

Now Answer the Next Question.

08/03/08 44
Practice Task

Q 4. Is initial solution of the problem is always optimum?

(True/False)

08/03/08 45
 Yes, you are right. Always all the solutions come are not
optimum, it is only guide us to tell in which direction the
solution can be optimum.

Now Answer the Next Question.

08/03/08 46
 No, you are wrong. The initial solution may or may not be optimum.
There can other alternative or better solutions available.

Now Answer the Next Question.

08/03/08 47
Practice Task

Q 5. Resistance to change is common, when the solution is

implemented in the organisation.

(Yes/No)

08/03/08 48
Yes, you are right. During the time of new solution is implemented, the
personnel of the organization resist to change the situations very often.

You are excellent! Now you learn the next input.

08/03/08 49
 No, you are wrong. Human resource in the organization creates
hurdles in changing the existing situations even in exist conditions are
not conducive.

You are excellent! Now you learn the next input.

08/03/08 50
 TECHNIQUES OF OR(1)
• Linear programming- It has been used to solve problems
involving assignment of jobs to machines, blending, product
mix, advertising media selection, least cost diet, distribution,
transportation and many others.

• Dynamic programming- It has been applied to capital

budgeting, selection of advertising media, cargo loading and
optimal routing problems.

• Waiting line or queuing theory- It has been useful to solve

problems of traffic congestion, repair and maintenance of
broken-down machines, number of service facilities,
scheduling and control of air-traffic, hospital operations,
counter in banks and railway booking agencies.

• Inventory control / planning- These models have been used

to determine economic order quantities, safety stocks, reorder
levels, minimum and maximum stock level.
08/03/08 51
 TECHNIQUES OF OR(2)
• Decision theory- It has been helpful in controlling
hurricuanes, water pollution, medicine, space exploration,
research and development projects.

• Network analysis (PERT& CPM)- These techniques have

been used in planning, scheduling and controlling
construction of dams, brides, roads and highways and
development & production of aircrafts, ships, computers etc.

• Simulation- It has been helpful in a wide variety of

probabilistic marketing situations.

• Theory of replacement- It has been extensively employed to

determine the optimum replacement interval for three types of
replacement problems:
i) Items that deteriorate with time.
ii) Items that do not deteriorate with time but fail suddenly.
iii) Staff replacement and recruitment.
08/03/08 52
 What is a Mathematical Model?
• The majority of practical decision problems are
described in very vague terms. Therefore, a most-
important step in a scientific or quantitative analysis
of a problem is to formulate a model that adequately
captures the essence of a problem. The result of
such a formulation, or an abstraction, is called a
mathematical optimization model.
• Generally speaking,
a mathematical optimization model has the
following typical components:
• a set of decision variables
• an objective function, expressed in terms of the
decision variables, that is to be minimized or
maximized
• a set of constraints that limit the possible values of
the decision variables
08/03/08 53
 ADVANTAGES
• Provides a tool for scientific analysis.
• Provides solution for various business problems.
• Enables proper deployment of resources.
• Helps in minimizing waiting and servicing costs.
• Enables the management to decide when to buy
and how much to buy?
• Assists in choosing an optimum strategy.
• Renders great help in optimum resource allocation.
• Facilitates the process of decision making.
• Management can know the reactions of the
integrated business systems.
• Helps a lot in the preparation of future managers.
08/03/08 54
 LIMITATIONS
• The inherent limitations concerning mathematical
expressions
• High costs are involved in the use of O.R.
techniques
• O.R. does not take into consideration the intangible
factors
• O.R. is only a tool of analysis and not the complete
decision-making process
• Other limitations
• Bias
• Inadequate objective functions
• Internal resistance
• Competence
•08/03/08
Reliability of the prepared solution 55
 Application Fields
• Industry
• Defense
• Planning
• Agriculture
• Public utilities

08/03/08 56
Practice Task

Ques. 1 Assignment of jobs to machines problems can be

solved by linear programming.
True

08/03/08 57
 Yes, you are right. Assignment Problems is solved with the help
of linear programming techniques.

You are excellent! Now you are at the end.

08/03/08 58
No, you are wrong. Assigning the machines problems can best
be solved by linear programming techniques.

You are excellent! Now you are at the end.

08/03/08 59
 References
• Operations Research : An Overview
Lecture by Mr. P. Ghosal,Department of
Information Technology,Bengal
Engineering & Science University,
Shibpur, February 14, 2007.
• Operations Research Simplified, chapter-1
from www.universalteacher.com

08/03/08 60
 THANKS

08/03/08 61